Saturday, December 18, 2010

New Gold Coast Apartments - Colliers Report

The Gold Coast new apartment market has seen a continued decline in stock levels during the third quarter of 2010 to sit at its lowest level in six years

KEY FINDINGS.....

  • The Gold Coast and Tweed Coast new apartment market reported a total of 126 unconditional sales during the third quarter of 2010.
  • There were a total of 1,588 apartments available for sale at the end of September representing 3.1 years supply based on the current selling rate.
  • 2 projects sold out during the third quarter, and 2 projects were added.
  • The Southport / Labrador Precinct was the standout performer for the quarter with a total of 57 sales.
  • The high rise sector recorded the highest number of sales for the third quarter with 79 (63%) of the total 126 recorded.
  • The average sale price of a new apartment during the third quarter was around $680,000.

Pets in 212 Margaret

As reported in a prior post, there was a decision relating to pets in 212 Margaret apartment building in Brisbane. Here is the Decision.

It is interesting to read the submissions of some apartment owners who tried to prevent pets in other people's apartments. Maybe we should have a rule that says no children and TVs in their apartments. I have lived in expensive apartments in other cities where most people have pets. Some people in Brisbane are quite backwards! It is also strange that people have argued that there should be no pets because the building is being used (illegally) as a hotel!

"Jo Anast, owner of Lot 81, says she would like the possibility of having pets in the scheme and is in favour of the application.

Shane Doepel and Shaun Stevens, owners of Lot 31, say that the building is not suitable for housing pets in any circumstances, being a high-density CBD residential development. Most of the units are let as part of a very busy hotel. The scheme only has “modest common areas.” Owners who are buying into the scheme do so knowing that there is a “no pets” policy which in their case influenced their decision to buy.

Frank and Marilyn Moes, owners of Lot 61 (unit 1501) say that they purchased because of the “no pets” policy. They do not believe that living in the city is an appropriate environment for animals such as dogs and cats. There are no immediate close areas where a dog can be exercised, and dogs and cats should not be in all day but have a yard to play in and access to fresh air. Mr Moes also has an allergy to animal hair.

Rachel Findlay, owner of Lot 23 (unit 805) supports the application, believing it unreasonable to ban all pets. She has lived in CBD buildings which allow pets, and the animals have not been disruptive. In “Aurora” at 420 Queen Street, it is one of the reasons why the units are highly sought after. The body corporate should allow pets within reason such as pets below a certain weight/size.

Maria Barnett and Paul Schaller, owners of Lot 121 (unit 2701), say that before purchase they checked that pets were not allowed. He has severe allergies to dog and cat hair and would not be able to use the lifts or foyer if there was animal hair in the carpets. They say that in their experience with tenants, fish tanks can cause damage to carpets, clog drains and leave stains. The building is used as a hotel so a blanket ban on pets in not unreasonable. No matter how well- behaved pets are, they would cause extra work for the management and result in blocked-in balconies which would change the exterior of the building.

Verne Baistow, owner of Lot 95 (unit 2203) says that he supports a “no pets policy.” The units are too small to provide adequate room for an animal, and the units are used for hotel accommodation. “No animals are allowed in hotels” so there should not be any animals in the scheme building either. He is also concerned about health issues and noise.

Colin Yeoman and Louisa Farthing, owners of Lot 33 (room 1005) say that the registered by-law should remain as it is, since the building is inappropriate for the housing of pets.

Christine Torbey, owner of Unit 1801, says that the building is an inappropriate residence for pets, especially dogs and cats. Animals are unpredictable and it is not possible for an owner to control entirely an animal’s behaviour. She says that this is a “standard rule in city apartment blocks generally.”

Gregory Firth, owner of Unit 603 says that the scheme should not entertain pets at all."

"Likely to be orderly"

AUSTRALIA'S house prices are over-valued by 5 per cent to 10 per cent but any correction is ''likely to be orderly'' and the result of income and rent rises rather than a collapse in prices, says the International Monetary Fund.

See Brisbane Times

Brisbane Apartment Report from Colliers

The Brisbane Apartment market has recognised its strongest quarter of sales in over six years and suggests that Brisbane apartments are back on the radar for investors seeking low priced, yield driven product.

KEY FINDINGS.....

  • The Inner North was again the top performer, leading Brisbane purely through supply of price pointed apartments.
  • Q3 2010 finished with 1,584 new apartments available for sale in Inner Brisbane.
  • 425 unconditional sales were made, suggesting a new unit supply of 11 months.
  • The weighted average sales price of new apartments in Brisbane for Q3 was $534,894.
  • The median price of units in Inner Brisbane was $445,000.
  • High levels of residential supply are expected to enter the market in the short term.


South Point


The development, which incorporates the Heritage listed Collins Place building, will include three separate structures on the 0.85 hectare parcel of land.

A 20-storey building on the corner of Grey Street and Tribune Street will include a five-star hotel and 210 apartments.

The Emporium Hotel, Southpoint will include 132 rooms as well as a day spa, gymnasium, boutique conferencing facilities, restaurants and bars.

A 17-storey building at the centre of the site will consist of 2 storeys of retail including a full-range supermarket and 15 storeys of commercial offices. The upper level of the retail component will offer direct connection to the rail platform.

A third 24-storey building, on the corner of Vulture and Grey Streets will comprise 248 one, two and three bedroom apartments.

The development will be constructed in separate stages to meet the anticipated early demand for both the residential and commercial components.

South Point will bring a diverse range of new audiences to South Bank for both work and play and it will help to cement Grey Street as one of the great streets in Brisbane.

See South Bank newsletter.

Friday, December 17, 2010

The Oracle Goes Bust

Not unexpected - The Oracle tower's developer at Broadbeach went bust this week. It seems that the bank valuations for the off-the-plan sales were way less than the contract price, and so many apartments did not settle because the purchaser could not get finance. It seems that the banks were putting pressure on the developer to settle at lower prices. A downward spiral.

Admiralty Apartment Report

Colin Walsh from Ray White issued a report recently about the Admiralty Precinct. Here are some extracts:

Admiralty Quays

  • "one of the most sought after residences within the Brisbane CBD"
  • three bedroom sale for $1,350,000
  • 2 bed type C average price 2010 = $780,000

Admiralty Towers I

  • "Brisbane CBD's most tightly held residential apartment building"
  • 5 sales recorded this year
  • 2 bedroom sold for $750,000

Admiralty Towers II

  • "one of the most prestigious and desirable buildings in the Brisbane CBD"
  • 8 sales recorded this year
  • 3 bedroom sold for $1,063,800
  • 2 bed type C average price 2010 = $718,000
  • 2 bed type B average price 2010 = $838,000

Skyline

  • 15 sales recorded this year
  • 2 bed type J average price 2010 = $582,500
  • 2 bed type I average price 2010 = $647,100

Riverplace

  • "most affordable riverfront residential building in the Brisbane CBD"
  • 14 sales recorded this year
  • 2 bed type E average price 2010 = $527,500
  • 2 bed type B average price 2010 = $720,000

Aerial Photos of Brisbane

Mirvac's Newstead Waterfront project

Mirvac's Tennyson project

Pradella's Water's Edge

Kelvin Grove Urban Village

Chermside

South Bank

(photos taken September 2010)

Saturday, December 11, 2010

Casino Towers to Loose River Views

A new highrise hotel is to be built on the old State library site will block out river views from Casino Towers. So take care when buying in Casino Towers!

Friday, December 10, 2010

Apartment Sales Data

Double click image to make larger.

Real Estate Agents Say Ideal Conditions for Investors

The real estate agents industry lobby group, REIQ, issued a press release today, putting a positive spin on apartment sales in Queensland:

"Reduced demand for investment properties is providing ideal conditions for buyers, according to the Real Estate Institute of Queensland (REIQ).


Over the September quarter, median unit and townhouse prices held steady in most areas of the state, while demand for properties usually targeted by investors and first home buyers reduced markedly as economic conditions and higher interest rates sidelined buyers.


Preliminary sales in the $350,000 to $500,000 price bracket across the State fell more than 20 per cent compared to the June quarter while sales in all other price brackets held their ground.


“The number of first home buyers has fallen since their high of last year, however, we anticipate demand from first-timers to continue to gradually increase next year,” REIQ managing director Dan Molloy said.


“Investors have also been sitting on the sidelines, with investment demand currently half of what it is was during 2007.


“Investors and first home buyers are usually competing for the same affordably-priced properties but the current lack of competition between these two buyer types has created ideal buying conditions, especially for investors.”

Sunday, December 5, 2010

US News

"LOOKING for a deal in a down market? As winter sets in, the fruits of desperation — foreclosure sales, short sales, auction sales and deep discounts — are appearing in bountiful number, if anyone out there is hungry for a bargain."

TWO-BEDROOM apartments have long been the workhorse of the New York City real estate market, accounting year after year for the largest percentage of apartments sold.

When the recession hit, buyers fled the market and prices fell across the board. After things stabilized in late 2009, the market share for two-bedrooms had dropped from a typical 40 percent to as low as 25 percent, because more people had found that they could afford three-bedrooms, which took sales away from two-bedrooms.

Now, after a lull that has lasted for more than a year, two-bedrooms are back.

NYTimes

Real Estate Investors Look to the Future, and See Signs to Buy Apartment Towers


FOR some New Yorkers on the hunt for an apartment, the must-have item in the search is nothing as prosaic as a walk-in closet or a second bathroom. It is a number — a lucky number.

Saturday, December 4, 2010

Brisbane Market About To Get Worse?


RP Data reports the following:

"The number of properties being advertised for sale nationally has risen sharply during the spring selling season of this year and the current volume of stock on the market is higher than those levels recorded during the depths of the GFC. ...

Across the major states, total listings are at the highest levels within Queensland. Across the state there are currently 75,655 properties advertised for sale which is the highest volume since RP Data started tracking listing volumes in 2007. ...

Despite Queensland being the country’s third most populous state, the number of property listings in Queensland are 15% higher than what is being recorded in New South Wales and 61% higher than Victorian listings. Since September 2009, Queensland has consistently recorded a greater volume of stock advertised for sale than that within New South Wales. ...

Within Brisbane and Hobart the number of properties advertised for sale are at their highest level since the beginning of 2007. ...

The real test for the property market will be around February of next year. Last time listings mounted to similar levels as they are currently the number of properties advertised for sale did not return to the pre Christmas levels. During the other two post Christmas periods detailed the volume of listings rapidly returned to pre Christmas levels in February. Should listings return to current levels it will indicate that there are many vendors who, for one reason or another, are willing to brave the slow market conditions and press ahead with the sale of their home. If listings don’t return to their current levels around February it probably means that many vendors have reassessed their position and preferred to hold off selling until conditions improve. Overall, listings data during the early part of 2011 will provide a very timely indicator and significant insight into the overall health of the Australian residential property market. "


More Details from Colliers Apartment Report

A post below mentioned the Colliers September 2010 Brisbane Apartment report. See "Why Are Colliers Optimistic". Some more details:

See this report:

Lachlan Walker, Colliers International project management & research - residential, says the Brisbane apartment market is in a similar position in the property cycle as it was more than a decade ago, where the market was looking more positive and just a few years from a major property boom, following a substantial period of depressed market conditions.

"The resounding theme for the September 2010 quarter is that the Brisbane Apartment market has made strong progress in recovering from the effects of the GFC," he says.

"It has been a difficult two years since the impacts of the declining US economy impacted the Australian property market, however the most recent quarter has seen the strongest rate of sale for the Brisbane market since 2004."

The report revealed that there were 425 unconditional sales of new apartments within Brisbane's Inner Ring, encompassing the five kilometre radius from the CBD, representing an increase of 21 per cent per cent from the 276 sales recorded in the June 2010 quarter. This brings the total unconditional sales for the 2010 year to-date to 977 transactions for Brisbane's Inner Ring, 182 more transactions than recorded for the entire 2009 calendar year. It must be noted that 32 per cent or 135 of the 425 unconditional sales were recorded in Laing O'Rourke's new residential release, M & A, in Brisbane's Fortitude Valley.

Other strong performers were FKP's The Milton to be developed by FKP which registered 68 unconditional sales for the three month period, as well as Devine's Riverside Hamilton and Aria Property Group's Station 16, which saw 41 and 42 sales respectively.


More Losses

Mirvac's Tennyson Reach: Apt 3302 is listed for sale at "half price". This is a three bedroom riverfront apartment (on a low floor). Approximately 150sqm. Listed for sale for $865,000 (a huge loss for the current owner).

Riparian, Apt 4504 at 71 Eagle Street. Sold by Mikki Finlay for $1,286,000 at auction last week. 2 bed, 2 bath, 2 car, 186 sqm. Last sold in March 2006 for $1,575,000. Good job Mikki, you only sold at a capital lost of $289,000 plus stamp duty. Hope you didn't charge commission?! Maybe sellers would do better listing on eBay?

Buyer Confidence Low

Extracts from a story in today's Courier Mail:

HOMEBUYER confidence has taken a dive in southeast Queensland with predictions of more pain to come.

While auction clearance rates have been on the way down for months, auctioneers are now reporting a drop in those even registering to bid.

Auctioneer Jason Andrew said only half the auctions he held last week attracted bidder registrations – significantly down on the highs of 80 per cent over the previous two weeks.

"Sixty one per cent of the properties we auctioned did not attract a genuine bid," he said.

" One property in particular sold for almost $300,000 under the vendor's original reserve."


Thursday, December 2, 2010

Hotel To Block Apartment Views

A new highrise hotel complex is planned for downtown Brisbane. If built, it will be located next door to the Vision hole, and adjacent to 212 Margaret and River City Apartments. It will block views from apartments in both buildings, so take care!

It will be located at 103 Mary Street, and will be 32 storeys, with 230 apartments or hotel rooms, but only 53 car parks.

See Brisbane Times.

Top End Heading Towards The Bottom

Here is evidence that, despite what real estate agents and developers tell you, the top end apartment market is not going great. Many people have overpaid in the past 4 years.

Apt 80 in Flow, at West End, now listed for $1,850,000. This is a massive 4 bedroom, 3.5 bathrooms, 4 car, riverview penthouse apartment. It is 272 sqm internal, and 370 sqm total floor space. It has been for sale for a while. It went to auction in March 2009 and did not sell. (It was purchased off-the-plan in 2006 for over $2.3M. I think a real estate agent's investment company purchased it, but am not sure. So with stamp duty and interest, a loss over well over half a million bucks!)

By comparison, Apt 23, on a lower floor (3rd floor -- partial river views) - 3 bedrooms, was listed for sale by the developer for $1.4M in November 2007.

Or the same developer, Pradella, was selling apartments off-the-plan in Waters Edge next door in May 2008 which are not as good for $1.9M to $2.2M (these are A1 and A2 apartments, 159 sqm, 3 bedrooms).

So you can see that prices being paid for expensive apartments have not held up. (Flow and Waters Edge and Riverpoint are not the greatest locations, looking west, in a semi-industrial area a long walk from any facilities. Infrastructure touted by developers 4 years ago has not arrived.)

If Flow has been a bad investment for some, what about a $4.5M capital loss. See this story.

Tuesday, November 30, 2010

Values Steady, but Headwinds Loom: RP Data


"Dwelling values were up a modest 0.3% in seasonally-adjusted terms during October. Yet the November rate rise, bank top-ups, declining clearance rates, and a rising stock of unsold homes hint at tougher times ahead.

According to RP Data-Rismark’s market-leading Hedonic Home Value Index, Australian capital city dwelling values continued to consolidate in the month of October with a small seasonally-adjusted rise of 0.3% (+0.6% raw). In the first 10 months of the year, Australian capital city dwelling values have risen by a modest 4.3% (s.a.) (or +5.7% raw), which is broadly in line with disposable income growth. Capital gains in the twelve months to end October have been a solid 6.5% due to the double-digit annualised growth recorded in late 2009 and early 2010. Based on the RP Data-Rismark Index, the market peaked in May 2010 with capital city home values tapering since that time (-0.7% s.a., -0.6% raw). ... RP Data’s research director, Tim Lawless, commented, “Since the market started to cool in June the cumulative decline in dwelling values to the end of October has been less than one per cent across the capitals, suggesting a market that is slowing at a controlled pace. Of course, the October data doesn’t include any effect from the November interest rate rise, which we expect will have caused conditions to cool further.” ... Market conditions remain diverse across the key cities. Perth and Brisbane have been the weakest performers. These are the only capital city markets where home values have declined over the twelve months to October (-1.8% and -0.7%, respectively). Both cities have continued to lilt over the three months to end of October with home values down -3.8% s.a. in Perth and -1.6% s.a. in Brisbane. ...
While capital gains slow, RP Data-Rismark’s Indices show that rental markets have realised some gains across most capital cities. Over the 12 months to October gross weekly rents are up 3.7% or $15/week to $433/week for the combined house and unit market. According to Mr Lawless, “The increase in rental rates hasn’t been enough to impact greatly on yields just yet. Across the combined capitals gross rental yields are at 4.0% for houses and 4.8% for units, however there is typically a spike in rents around January and February as a large number of leases are renewed which is likely to see a more noticeable shift in yields.” ... Leading indicators in the market continue to foreshadow weak market conditions going forward. According to RP Data’s Tim Lawless, “capital city auction clearance rates are generally bobbing between 50% and 55% week to week suggesting that vendors still need to adjust their price expectations in order to make a sale. The average selling time for private treaty sales has increased to 48 days for houses from a low of 39 days late last year and sellers are now discounting their listed prices by about 5.7% on average to make a sale compared with 4.1% earlier this year.” Potentially the most concerning leading indicator is the build-up of properties available for sale. Compared with last year there are currently 23% more homes available for sale than there were 12 months ago. RP Data is tracking 126,860 unique properties available for sale within the capital cities, which is 23% higher than at the same time last year. Total listings are now just 1% lower than the previous peak which was recorded in the last week of October, 2008. According to Mr Lawless, “the escalation in stock levels is due to the combination of a higher than normal number of homes being added to the market at a time when market activity is slowing. The result has been a fairly rapid increase in the number of homes for sale. That’s great news for buyers who can take their pick and negotiate hard, but for sellers this is far from an ideal time to be listing your home.” Rismark’s Ben Skilbeck added, “Rismark’s national Dwelling Price-to-Disposable Household Income Ratio Index, which will be released later this week, was sitting at around 4.6 times in the second quarter of 2010. This was in line with where the ratio of homes price-to-incomes had been for the preceding seven years. The good news is that the current flat-lining in home values should result in a moderation in the national price-to-income ratio and present patient buyers with interesting opportunities in the year ahead.” Mr Lawless believes the outlook for residential property is likely to be fairly sedate over the coming 12 months. “If we use market conditions after the 2000 to 2003 property boom as a guide, month to month value changes saw a mixture of small upwards and downward movements over the following two years with total value growth just 4.7% between December 2003 and December 2005. Unemployment at that time was 5.9% and trending downwards and the resources sector was heating up. In the years ahead the RBA is forecasting very strong household income and employment growth. These two factors should help mitigate the impact of higher rate rises and prevent any material decline in prices.”

Source: RP Data

Thursday, November 25, 2010

Why Are Colliers Optimistic?

In The Australian this week, a story about the Colliers Real Estate Agents Brisbane Apartment Report:

"Its Brisbane apartment report for the September quarter found a 56 per cent surge in the number of inner-ring unit sales, compared with the September quarter last year, for the area within a 5km radius from the central business district.

"Broadly speaking, the Brisbane apartment market is in a similar position in the property cycle as it was more than a decade ago," Colliers International Brisbane-based research analyst Lachlan Walker said. At that stage, "the market was looking more positive and just a few years from a major property boom".

The resounding theme was that the Brisbane apartment market had made strong progress in recovering from the effects of the global financial crisis."

Source: The Australian

Now my personal view: You have to take what Colliers says with a grain of salt. They are real estate agents, who are hired by developers and apartment owners to sell apartments. Of course they would sprout a positive outlook. The Brisbane inner city apartment market at the moment is not strong. Comparing this year to last year (which wasn't a great year) doesn't really say much. There has been little to no capital growth in recent times, and probably a decease in value. At present, there are more sellers than buyers; prices are not rising; it is uncertain what the rental market will be like in 2011, particularly if students do not come to Brisbane. The smart money is waiting on the sidelines -- buying an existing apartment in six months time (when prices will not be more, and will likely be less) looks like a good thing to do.

Checklists

See www.mystratamanagement.com.au for an apartment buyer's guide and building checklist.

Wednesday, November 24, 2010

Trying to Get Out of an Off-the-plan Contract

Here is a decision regarding an investor trying to get out of two off-the-plan contracts for apartments in The Oracle at Broadbeach. The judge decided that the case will have to go to trial. As purchasers at Tennyson Reach have found out, it is not easy to get out of off-the-plan contracts.

Thursday, November 18, 2010

Felix Auction

It is always good to see what happens at normal auctions. An apartment in Felix, 307/26 Felix Street, went to auction today. See listing. It is a 2 bedroom, 2 bathroom apartment on a higher floor, with decent views (some river glimpses) but a little lack of privacy due to Waterfront Place, and the possibility of being built out if the building next door or behind is developed. 78 sqm internal floor area, 91 sqm total.

There were 3 registered bidders. The highest bid was $482,000. The apartment is now listed at $525,000. This gives a range of between $5,300 and $5,700 a sqm -- which is good to keep in mind if you are buying an apartment off the plan.

"Chinese love the Sunshine State"

Story from the AFR on Friday last week -- "Chinese love the Sunshine State". The article states: "Half a dozen significant high-rise properties on the Gold Coast and Brisbane, which are believed to have secured a significant proportion of foreign investors, are due to settle in the next 12 months."

See also Gold Coast Bulliten

Gold Coast Collapsing

Story from the AFR on Friday last week - "Banks judge Gold Coast apartments as vulnerable".

"Westpac Banking Corp has a particularly cautious view, especially of luxury properties worth more than $3M on the Gold Coast, which is described as a key area for 'additional risk management focus'. There are hundreds of apartments on the Gold Coast priced at more than $3M. At the Oracle development at Broadbeach, there are at least 50; at two other projects coming to completion - Juniper's Soul and Brookfield's Hilton - there are more than 100."

Story from The Australian today: "Gold Coast High Rise Stress Underestimated"

"MAJOR bank Suncorp estimates that less than 10 per cent of buyers are defaulting on several major apartment projects on the Gold Coast.

Gold Coast property agents have claimed the estimate was extremely optimistic. ...

"They'll be celebrating in the streets if it's only 10 per cent default," one Gold Coast agent said.

"There's a lot of rumours around about settlements, but it's all looking very slow."

Soul has been on the market for five years and, while the market boomed for the first three of those years, the global financial crisis cut the value of these units substantially."

Riverpoint Auction - No Result

A new Riverpoint apartment at West End failed to sell at a high profile Ray White auction. The highest bid was $3.5M. This is less than $4000 a sqm.

This apartment is back from the river, with terrace houses and a pool between the apartment building and the river. See Auction video.

Saturday, November 13, 2010

Rental Returns - from RP Data Property Pulse


"... During the five years to September 2010, the Australian residential property market has experienced a variety of conditions, modest growth conditions in 2005/06, rapid appreciation in 2007, falling values in 2008 followed by another strong growth phase in 2009/10. Despite the range of conditions over this five year period, overall property values have increased at the average rate of 7.1% year on year. ...

In dollar terms, house values have increased by a total of almost $140,000 over the last five years and unit values have increased by approximately $123,000. ...

Over the same period rental rates have also ramped up and, similar to the capital gain performance, the growth has not been uniform from year to year. Between September 2005 and the end of 2008, rental rates were typically trending upwards at the rate of almost 11% year on year. In 2009 capital city rents increased by just 0.9% and we are now seeing the first evidence of rental growth once again returning to the market. ...

For units, Darwin has again recorded the strongest value growth during the past five years (99.8%) followed by Adelaide (69.6%). Unit rental growth has well and truly lagged in Sydney (27.8%) and to a lesser extent also in Brisbane (44.8%).

Unit rental growth over the last five years has also recorded significant increases in Darwin (84.0%) and Perth (61.7%). The three largest cities have recorded the lowest levels of rental growth at 39.6% (Melbourne), 40.6% (Brisbane) and 42.8% (Sydney). ...

Overall the results highlight the virtues of having a long-term hold strategy in relation to property purchases with property values, rents and subsequently yields having historically proven to increase over time. Over the next 12 months we are anticipating fairly flat growth in property values however, we do expect that rents and yields will improve. With an insufficient supply of homes, upwards pressure will remain on housing prices over the long term, however price inflation will be offset by affordability constraints which will hamper prospective purchaser’s ability to enter the residential market.

As a result, competition for rental accommodation is likely to intensify and weekly rents will rise. These conditions highlight just how imperative it is that Government’s find a solution to housing supply issues, as the national graphs highlight, over the last five years conditions have been such that either property values have increased, rental rates have increased or both have been climbing. Supply is clearly a large contributor to these prevailing conditions."



Pet Friendly Apartments

A resident of an apartment recently filed a dispute resolution request to an Adjudicator within the Body Corporate Commissioners Office in Brisbane, disputing the current status of the by-law in the residential high-rise building 212 Margaret Street, BRISBANE QLD 4000. The resident was protesting the total pet ban in the buildings by-laws.

Basically, the Adjudicator has upheld the protest that the 212 Margaret by-laws, which did not permit any pets at all, were invalid and unenforceable, and has ordered them changed to a permissive by-law. This dates back to a CCT ruling in 2008 (Tutton v Body Corporate for Pivital Point Residential) where the CCT magistrate ruled that total pet bans were unreasonable since certain species of animal could on no rational basis cause any difficulty to any other lot owner.

The Adjudicators have been ruling that total pet bans are invalid since that time (there are quite a few decisions it seems), and have forced Body Corporate's in every case since to alter their by-laws back to standard (animal/pet) permissive ones when an owner applies for Adjudication.

In addition, it appears there has been a further QCATA ruling in September 2010 -- McKenzie v Body Corporate for Kings Row Centre 28/09/2010 -- in which the tribunal decided that even by-laws that attempt to ban only a certain type of pet (cats and dogs) are also so unreasonable as to be effectively invalid and unenforceable. In that case, the disputed by-law was permissive of pets in general but attempted to outright ban only 'cats and dogs' specifically.

Essentially this all comes together to mean that a (or any! within a Community Titles Scheme) Body Corporate can no longer expect to ban pets (or any kind of pet) outright, even if they have already done so by voting in a ban/restrictive by-law, or even if the building was originally set up with a pet ban/restrictive by-law.

It also means that if anyone protests such a restriction, the Adjudicators will uphold their protest, allow the pet (if it's a reasonable request and there is no evidence of a reasonable reason the pet would be unsuited to the property), and forcibly change the by-law back to a permissive one. Just like they just did with 212 Margaret.

The flow on outcome from these rulings are clear: the face of Community Titles Schemes must now change - pets can no longer be banned, and Committees and Body Corporate's can no longer expect to stop people from bringing their pets to live with them in apartments, units or townhouses - unless they can provide reasonable grounds or evidence that the particular pet would be unsuited to the lot. From what I understand, this new thinking has already been tested multiple times in the Appeals process and the Adjudicators subsequent interpretation of this has also been made abundantly clear.

212 Margaret is now (forcibly) pet friendly.

Which is probably a good thing, because statistics I have seen show that apartment buildings that are pet friendly have more owner occupiers and have greater capital appreciation.

SouthPoint Coming Soon?


Will the SouthPoint apartment and hotel development at SouthBank ever get started? Reported to start later this year. (But they have said that before!) It is a project of the Anthony John Group. Designed by Jackson Teece.

Fairfax is Getting Dumber

>

Recently, the Domain property website had an offer -- Saturday's Sydney Morning Herald and the Sunday newspaper delivered in hardcopy for $10 total for 10 weeks. I thought that this would be good, so that I could look at the real estate advertised for sale in Sydney. So far, about 5 weeks into the subscription, I have received only 2 newspapers. And the Saturday SMH that is delivered does not include a real estate section. No wonder Fairfax is going backwards.

Will Mosaic Go Ahead?

ONE of Australia's biggest developers has continued to sell units in a proposed $150 million Brisbane tower even though city planners have rejected the project.

Since marketing started a year ago, Leighton Properties has sold just over half of the 212 apartments in its planned Mosaic development at the corner of Ann and East streets in Fortitude Valley.

More than $4 million in deposits has been paid by 107 buyers - many of whom were told the 18-level residential and retail complex would be completed by late 2012.

But Brisbane City Council threw out the development application because of height concerns, forcing Leighton to file an appeal with Queensland's Planning and Environment Court in August.

Leighton state manager Andrew Borger said he met with council planners this week and the two sides were ''narrowing down the issues''.

If no deal is struck, a five-day court hearing has been set down for March next year.

Mosaic unit buyer Wagner Higgins said she recently learned about the question mark hanging over what could be one of the Valley's biggest developments.

''It does concern me because I would really like to live at that address,'' Ms Higgins said. ''But I don't think my money is at risk. The worst-case scenario is I get my money back.''

Ms Higgins, who paid a 10 per cent deposit, said Leighton representatives had been ''very forthcoming'' about the lack of approval and told her they were ''very confident'' it would proceed.

Yet she fears that her penthouse may disappear if height issues force a redesign of the project.

Council records reveal that planners also raised concerns with Leighton about the building's engineering, architecture and landscaping design.

Despite these hurdles, a Mosaic salesman last week claimed that approval was ''imminent'' and construction work would kick off in the first quarter of next year. A crane is already on site working on a neighbouring property.

In its appeal, Leighton said the Mosaic knockback had been ''overtaken by events'' since projects of ''greater building size, bulk and height'' had secured approvals in the Valley.

Among these were a council depot on St Paul's Terrace and a 20-level residential tower at Ann and McLachlan streets, the company said. But a council spokesperson said it was up to buyers to inform themselves before acquiring a property.

''Council strongly recommends people who are interested in buying units off the plan to satisfy themselves that the development has received all relevant development approvals prior to finalising their purchase,'' the spokesperson said.

Source: Courier Mail


Albert Street Railway


Royal on the Park (the old Park Royal Hotel) owned by the Sultan of Brunei is to be resumed to build an underground train station. How will this impact Sunland's proposed development on Alice Street at Albert Street?

"ONE of Brisbane's major inner-city hotels will be resumed with 38 other properties for the city's first underground rail line, it has been revealed. ...

Under the plans the Royal on the Park hotel will need to be resumed, alongside 38 other commercial and industrial properties in Salisbury, Rocklea, the CBD and Bowen Hills."

Source: Courier Mail and see also Brisbane Times

At least you will be able to get free WiFi here.


Sunday, November 7, 2010

Spring Hill - Trilogy Apartments

There were 3 auctions last weekend of 2 bedroom apartments in the Trilogy complex at Spring Hill (namely, apartments 226, 330 and 334)

This complex was heavily marketed (at high prices) by Which Property? who was also related to the developer.

The Courier Mail reported that apartments were passed in for $400,000 and $420,000 (about $150,000 less than the prices that the developer was seeking about 2 years ago).

These are relatively decent apartments, some with good views, and a large pool area. The apartments are not large (about 75 sqm internal) but are well designed. Not far from the downtown.

Listing at $490,000 (Apt 334, 51 Hope Street)

Listing at $490,000 (Apt 226)

Listing at $550,000 (Apt 330)

Listing at $680,000 (Apt 354)

A 2 bed, 2 bath sold in 2009 for $540,000.

A furnished 2 bedroom is available for rent for $650 a week. See also here.

Apartments or Hotels

"... Mr Punch alleged in his statement of claim that the original disclosure statement received from Niecon subsidiary South Sky Investments revealed that he was buying 'a lot in a residential building'.

If he were buying today, that disclosure statement would have to declare it was an 'apartment in a hotel', he said in the claim. ..."

From GoldCoast.com.au

This is a warning to developers who build apartment buildings (such as Aurora) and then sell the management rights to Oaks to operate a residential building as a hotel.

Flats Are Flat

There are head-winds for investors in the Brisbane apartment market:

  • slowing population growth
  • foreign investors selling, because they profit from the high Aussie dollar
  • foreign investors not buying due to the high Aussie dollar
  • less foreign students, so less renters
  • higher interest rates

Recent articles set out some of these concerns....

"QIC chief executive Doug McTaggart has painted a grim picture of the residential market in South East Queensland. ... "Population growth in Queensland is suffering." ... Herron Todd White estimated there had been a 30 per cent drop in volumes from 2008. ... vacancy rates are trending up at the moment ... the current Brisbane market is showing some oversupply... " Australian Financial Review, 4 November 2010, page 60

"Overseas students and retirees are fuelling population growth in Brisbane's inner city, with nearly 13,000 people now calling the CBD home. While Brisbane's fastest-growing suburbs are in the city's east and south, the growth of inner-city living is the perhaps the most visible change.

"A lot of the accommodation now is just built for students and they have just small kitchens," Ms McLean said. She said five of the unit buildings in Brisbane's CBD were mostly student accommodation.

"Some of them where the students are living are turning into ghettos," Ms McLean said.

"Down Albert Street, Mary Street, at the Parklands (apartments) there at Roma Street," she said.

Source: CBD bulges as more move in

Units in Brisbane are among the cheapest in the country as property prices in the city continue to slide, according to analysts.

The Australian Property Monitors September House Price Report, released today, shows the median unit price in Brisbane fell 2.8 per cent from $366,533 to $356,352 in the last quarter.

Source: Brisbane unit prices on the slide

Brisbane's property market woes look set to continue for the forseeable future due a slump in migration and an oversupply in the market.

Analysts have tipped prices to remain stagnant or dip further at least until the middle of next year. ...

Property analyst Michael Matusik has long refuted claims of an undersupply in the owner-occupier and rental markets.

"Queensland's population growth is slowing - and significantly," he said. The state's net migration in 2008 was 84,275 people, with 21,228 arriving from interstate.

At the end of March this year, net migration fell to 55,845, with just 11,012 people coming from interstate.

"Our preliminary estimates suggest that more people are leaving Queensland now than arriving from interstate [due to the state economic downturn]," Mr Matusik said. Of the rental market he said: "The amount of vacant stock available is not only greater than most realise, but it is getting larger."

Mr Matusik said about 13,500 new rental properties were required to house 35,000 new residents to Queensland last year.

"Yet, 33,000 new rental digs became available - or over twice as many as was needed," he said. "This is not how I would define 'undersupply'."

Source: Property price slump